Pure gold of 99.9 percent purity fell by Rs 255 to conclude at Rs 26,900 per 10 gm, as compared to Rs 27,155.

Silver ready (.999 fineness) tumbled by Rs 715 to end at Rs 44,695 per kg from Rs 45,410 yesterday.

Gold prices in the National Capital, witnessed this year's second biggest fall of Rs 600 per ten grams to Rs 27,300, which is expected to trigger brisk retail purchase ahead of the wedding season.

The fall in gold prices is the second biggest since April 15 when the yellow metal plunged by Rs 1,160 to Rs 26,640 per ten grams in New Delhi.

Similarly, gold prices in Kolkata fell by 415 to Rs 27,525 and by Rs 390 to Rs 27,090 per ten grams in Chennai.

Earlier in the day, PM's Economic Advisory Council Chairman C Rangarajan however said, "Gold prices are unlikely either to go up or go down substantially in the coming months.

Citing reasons for huge fall in domestic gold prices, brokerage firm SMC Comtrade Chairman and Managing Director D K Aggarwal said: "Gold as an investment asset is losing its sheen across the world. Big investors in India and other economies are shifting to equity markets for better returns."

In the London market, gold fell to a three-week low as dollar strengthened making bullion weak, he added.

In the domestic market, Aggarwal said that the lower prices will further encourage physical buying of gold vis-a-vis investment demand.

Tracking global cues, silver prices in the national capital fell by a massive Rs 800 to Rs 44,700 per kg on reduced offtake by jewellers and industrial units.

Gold imports into India, the world's largest consumer of the metal, stood at around 830 tonne in 2012-13 fiscal. It jumped by 138 per cent to USD 7.5 billion last month, highest so far this year, pushing up the trade deficit to USD 17.7 billion and may worsen the CAD this fiscal.

The government has taken several steps, including raising import duty, to curb the inbound shipments of gold. RBI too has put restriction on banks to import gold.